With great excitement we announce today the Alpha launch of the Swarm investment and capital deployment platform.
Each member of the Swarm team is driven by the vision to build a self-sustaining ecosystem of real world investments on the blockchain, funded by cryptocurrency, governed and owned by the community, and powered by SWM. Our concerted efforts to manifest this vision have resulted in this first, and highly significant step today.
We know many of you want the tl;dr so here are the key points:
- Our product MVP is live today and we are proud to be the world’s first security token marketplace
- You can invest BTC or ETH into real world assets on Swarm now
- The Swarm Token (SWM) is the essential utility to every transaction and incentive on Swarm
- We will airdrop 100 SWM tokens to each individual who registers this week
Merely 3 months after closing our public token sale, we are now delivering on the promise we made to the community to launch the first alpha version, complete with real, operating businesses up and running on the system.
While this sort of comprehensive, fast-paced fruition is unique in today’s market landscape, we at Swarm believe in keeping promises, iterating quickly, and serving actual business needs on the platform from the get-go. This way, the evolution of our system design is intelligently guided by real user requirements and constant feedback. To that end, this is an MVP, a minimum viable product. It’s the first version ready to deliver to the public. There will be some kinks to work out, and many more key features to come in subsequent releases. We look forward to battle-proofing what we’ve built, releasing updates quickly, and engaging in ongoing dialogue with the community to continuously improve our platform and user experience.
We’ve seen a lot of excellent discussion and engagement in our social channels, including considered questions about how the platform will work in this first release. We would like to respond so that SWM token holders and Swarm community members know what to expect from today’s release.
Today in this first release there are two investment opportunities (IOs) available:
- Silicon Valley Coin (SVC): A $250 million fund managed by Andra Capital, a technology growth fund focused on late-stage investments, specifically in the Silicon Valley private technology sector, including well-known brands such as Airbnb, Lyft, Dropbox, Uber, SpaceX, Pinterest, and more.
- Needle-in-a-Haystack Coin (NIAH): A $20 million distressed real estate fund, managed by Niah Fund, that uses AI and workflow automation to identify target properties, automatically make purchase offers on qualifying homes, and deploy teams to service and prepare the properties for renting.
Each of these two opportunities have target return profiles of 15%+ and have chosen to open up their funds to be tokenized on Swarm and available for purchase by our community. Each will have a soft cap of $1 million, meaning that as soon as this amount is raised, the funds will be invested into the IO. Normally, when investing in alternative assets, individual investors must meet minimum capital requirements, however on Swarm, investors do not have to fulfill these themselves. Instead, the Swarm community raises the required capital collectively and individuals can invest as little, or as much, as they like. You will find more details on each opportunity within the platform.
In this Alpha release, getting started simply requires the creation of a basic user account on the Swarm platform. Then, after completing a standard KYC/AML (Know-Your-Customer/Anti-Money-Laundering) authorization, verifying ID, and declaring a source of funds, members will be able to deposit crypto funds into IOs (pending a cursory validation of account credentials by the Swarm team).
Allocating capital toward a specific investment opportunity works as follows:
- After depositing crypto funds into their account on the Swarm platform, investors have the option of allocating that BTC and/or ETH into any or all of the available IOs.
- Funds deposited remain denominated in their original currency (BTC or ETH) until the IO is fully funded (IO cap has been reached), or the investment period has ended.
- During the funding window, your balance will be displayed in your wallet both in the deposited currency, and in SUN tokens (which are pegged to USD).
- The value expressed in SUN tokens will reflect the real-time market price of BTC or ETH in USD.
- Once the funding phase of the IO concludes (due to time or funding parameters being met) or the target soft-cap is reached, your deposit is automatically converted to fiat (USD), reflective of current market value.
- Should the investment opportunity close without meeting its funding goal, each user’s allocated funds are released, ready and available to re-allocate to any other open opportunity. The released funds will remain denominated in the currency they were initially deposited in (BTC or ETH).
The SWM token
We laid out specifics on the SWM Token Utility and Value model recently (explained here). To that plan, Gas for Capital Deployment (GCD) will be required to be paid by investors when an investment is fully funded. At this alpha stage, GCD will be acquired through a manual process. Once the soft cap for a fund (NIAH or SVC) is reached, the total amount will be allocated in SUN, minus a 1.5% fee, payable in SWM. The platform will purchase this SWM on the market. Simply speaking, every time an investment is funded on Swarm, 1.5% of the total funds raised will be used to purchase SWM tokens as Gas. This will of course be built into a future release as an automatic function, and a detailed post on this is forthcoming.
The GCD scenario is just one example illustrating how the SWM token is essential to every transaction and decision taking place on the Swarm marketplace. Additionally, and importantly, the ability to invest directly with SWM will be included in an upcoming release.
The SUN token
We have also had questions as to the purpose and function of the SUN token, and would like to respond to these. SUN tokens are used as transitory pass-through tokens that facilitate the allocation of capital to an investment. They are pegged to the US dollar, such that 1 SUN always equals 1 USD. Their primary purpose is to allow users to deposit crypto assets (BTC, ETH, and SWM in the near future) and have them converted to USD equivalent before being allocated to a particular investment opportunity. This facilitates making just one deposit which can then be used to invest in multiple investment opportunities. Note that SUN tokens are not intended as a facility to park crypto assets or as an alternative to Tether and have not been created for these purposes.
We would also like to address the proposal to issue bonus SUN tokens to participants in the public token sale, as we are seeing questions about this from the community. The proposal was to issue SUN tokens in the ratio of 1 SUN for every 2 SWM tokens purchased in the token sale. Importantly, as specified in our whitepaper, this issue was only going to be activated if the token sale raised over US$20 million, which it did not.
In the spirit of that proposal, we do want to give back to our community and encourage people to register and use the platform. Therefore, we are happy to announce a SWM Token Airdrop of 100 SWM tokens to each person who registers on the investment platform in the first week after launch, up to 1,000,000 tokens. This means that every new account registered until 4 February will receive 100 free SWM tokens in their account. Tokens will be airdropped within two weeks of the end of the promotion (by 18 Feb). We are really excited to reward everyone who registers and get you all engaged with the platform.
The SRC20 Token
For those interested in the technical details of our SRC20 token implementation, it is important to note that these tokens reside in a completely different blockchain from our ERC20 SWM utility token. This structure supports both a decentralized architecture and regulatory compliance, two features we have consistently promised and are most dedicated to for the Swarm platform.
The blockchain for the SRC20 tokens is an implementation and extension of the Stellar protocol. All SRC20 tokens reside on this blockchain. We have chosen Stellar as it provides one of the foundational layers within blockchain technology.
Eventually, thanks to the use of this designated and resilient blockchain to track our security tokens, the Swarm foundation will be able to completely delegate all its functions to a decentralized autonomous organization, fully independent of any centralized authority, and self-governed. When we say “NO MIDDLEMEN”, we mean it!
For a deeper dive into this and more, keep an eye out for another upcoming blog post dedicated to our infrastructure, in which we explain the implementation of our SRC20 blockchain in more detail. There, we look forward to highlighting the benefits of the Swarm/Stellar infrastructure, particularly how it facilitates direct ownership, full liquid democracy voting, and the creation of the first legal infrastructure allowing real assets to be governed by their token holders. In case you hadn’t noticed, Swarm is not your normal crowd initiative!
Accredited Investors and Regulatory Compliance
For US residents, investment in these first two funds is open to accredited investors only. This is defined as having a net worth of at least $1,000,000 (excluding primary residence) OR income of $200,000+ for each of the last 2 years. ($300,000+ if married). We want to acknowledge that this restriction is in conflict with our mission of democratizing finance and bringing access to investors, yet we also need to continue to play by the rules to be sure we are around to fulfill this mission. Every fund on Swarm will have its own regulatory framework, and we have funds in our pipeline which we hope to be able to open to both accredited and non-accredited investors.
The platform will be available for user registration, deposits and investing at https://invest.swarm.fund. We will have live support available at launch. If you have a question, simply click on the support chat icons in the user interface, and get in touch with Swarm support, available on a 24-hour basis to answer questions via live chat.
Stay tuned for further announcements this week, full details on the airdrop, and other exciting news you’ve all been waiting for! Announcements regarding other investment opportunities are also not far away.
This blog post mainly covers the aspects of the visible platform MVP. But equally exciting are the inner workings of the underlying network infrastructure, the governance model, the legal model as well as the business value proposition and relationships of Swarm. Much of the work of the past months has gone into developing these areas into “MVP” stages and the plan to quickly develop beyond. As much as these areas not visible to the common eye, we will take the time in the upcoming weeks to talk more about them, as they each deserve their own focused coverage.
Open for business
Today, we officially open the Swarm platform to crypto and fiat investors alike, and invite all investors to explore the very platform that they will own, govern, and profit from, and to truly be part of the Swarm we know and love. We thank you deeply for your patience, and hope you will be as proud of what we’ve built as we are. This is just the very beginning…
Finally, if you are a fund or an investment opportunity and you believe your value proposition is something the Swarm community should know about and be able to invest into, get in touch with us at [email protected]
We are proud to say that Swarm is open for business!
Your Swarm Team.
Originally published at blog.swarm.fund on January 30, 2018.